Three crucial steps David Cameron must take to win the right EU deal for Britain

Throughout history, political turning points have been defined by dogmatic and
opposed points of view.

David Cameron must change the language and tone of the EU debatePhoto: Rex Features

By John Longworth

3:50PM GMT 17 Jan 2013

The current debate on Britain’s future relationship with the European Union is no exception, with dyed-in-the-wool Europhiles and Europhobes dominating newspapers and the airwaves.

Yet, there’s a pragmatic coalition building in favour of an alternative vision. Businesses want access to the European trading bloc, but at the same time want to avoid becoming embroiled in ever-closer union or a United States of Europe.

In recent weeks, it has been astonishing to watch the Europhiles undermining the Prime Minister’s ability to negotiate in Britain’s economic interest. Pro-European politicians who call for us to acquiesce to the current regime are playing right into the hands of those who want us to withdraw. Both sides are in danger of crowding out the possibility of a negotiated settlement, and neither is acting in the best economic interests of this country.

For businesspeople, a straight “in/out” referendum would not be ideal for Britain. Whatever the outcome of the vote, both the British economy and the British people would lose an opportunity.

Britain would lose with an “in” vote because it would be staying in an EU that is moving towards the sort of federal union British businesses and voters say they don’t want. Some 85pc of our companies have said no to further integration.

Let’s be clear: voting “in” wouldn’t let Britons choose the status quo. Although many Europhile politicians and 26pc of our businesspeople favour the status quo, preserving today’s EU in aspic is impossible. The eurozone, if it is to survive, requires a level of both fiscal and political integration that most Britons wouldn’t even countenance.

Britain also loses with an “out” vote. Although our trade with the rest of the world is growing, pulling up the drawbridges isn’t a win for the UK economy. Only 12pc of our businesses favour this option, as it would mean losing the four freedoms of goods, capital, services and people. Although far from perfect, these give British businesses access to the biggest unified market in the world.

There is no question that a changed relationship between Britain and the EU would need to be put to a referendum, as any proposed change would be a major alteration to our constitutional settlement. The real choice that the British public should be given is between a renegotiated relationship – favoured at present by nearly half of British Chambers of Commerce businesses – and leaving the European Union altogether.

That means giving the Prime Minister the support, space and time required to negotiate a better deal for Britain.

To win the right deal for Britain, the Prime Minister must seize the mantle of pragmatism, and take three crucial steps.

Firstly, he must reassure himself that Britain has a strong hand in any negotiation. The 17 members of the eurozone cannot meet their need for greater fiscal and political integration without the acquiescence of all 27 EU member states. Even more crucially, the Prime Minister’s negotiation position benefits from the fact that Britain runs a massive trade deficit with the rest of the EU. Would Germany – the biggest beneficiary of the Single Market in goods – really wish to lose its access to the UK market? EU countries depend on trade with Britain, not just the other way round.

Secondly, he must have a clear and logical set of proposals to underpin a new relationship between Britain and the EU. British businesses would like to see a better single market in services, which Mr Cameron could pursue alongside the return of powers, including the social chapter, agriculture and fisheries policy, and more, to Westminster. He must also insist on Britain’s right to develop a business bank on a par with Germany’s.

And thirdly, he must change the language and tone of the debate. Arguments in Brussels are won using words such as “subsidiarity” and “proximity”, not gung ho soundbites about “repatriation” or “taking back” power.

Europe is fast becoming the issue that will define David Cameron’s premiership. To get it right, he must listen to all businesses, not just the familiar names, as well as the general tenor of public opinion. Crucially, the other side must believe he is prepared to walk away from the negotiating table if he is to be taken seriously – and if he is to secure a deal.

Businesses are increasingly convinced that Britain needs an alternative vision for its future relationship with the EU, and that only careful renegotiation can deliver in Britain’s national interest. Those at the two extremes of the European debate would do well to take note.

John Longworth is director general of the British Chambers of Commerce